Is Canada at peak sanctions?

By Kyle Duggan, Zi-Ann Lum and Nick Taylor-Vaisey

Presented by The Coalition For Canadian Research

Welcome to Ottawa Playbook. Let's get into it.

In today's edition:

→ Tomorrow marks two years since Russia’s invasion of Ukraine.

→ Where does Canada stand on Dutch PM MARK RUTTE as NATO secretary general?

→ Who’s up and who’s down.

Smoke rises from a building in Bakhmut in the Donetsk region, Ukraine, April 26, 2023. | Libkos/AP

SOMBER WEEKEND — Tomorrow marks another full year of Russia’s war against Ukraine, a bleak milestone sure to play a big part in the weekend political talk circuit.

Ukraine remains dependent on its neighbors and allies for support and Russia is playing waiting game seeking to outlast them in the conflict.

Foreign Affairs Minister MÉLANIE JOLY is in New York today to speak at the U.N. on the anniversary.

Joly was at last weekend’s Munich Security Conference, where the Czech Republic pushed for allies to boost the supply of artillery shells to Ukraine. Top European diplomats have warned Ukraine is struggling and needs more ammo.

— Supplies: Defense Minister BILL BLAIR has hinted there’s something in the works about boosting Canadian production of munitions while also speeding up supplies to Ukraine but details are MIA.

The Russian offensive is expected to taper in the spring, introducing opportunity for a counter attack, as Carleton international affairs professor DANE ROWLANDS previously told Playbook. That will hinge on what munitions get delivered — unpredictable, since the latest U.S. support package is still jammed up in the works and there are concerns Europe is falling short on its ammo pledge.

When asked by a CP reporter Thursday about the need for Ukraine to arm up with 155-calibre shells, Prime Minister JUSTIN TRUDEAU reached for the talking points. “We’ve committed close to C$2.5 billion in military aid that continues to flow to Ukraine to be able to have them stand up not just to Russia to protect their territory but to protect the principles and values that underpin all of our democracies,” he said.

— Pressure is up: Conservative MPs JAMES BEZAN and MICHAEL CHONG accused the Liberal government earlier this week of being “quick to announce” and “slow to act” on military aid, and lashed out over a Globe report that electronic parts are bypassing sanctions and ending up in Russian weapons equipment.

And then there’s still that question of when Canada’s promised surface-to-air missile defense unit will arrive.

The Liberals are meanwhile happy to keep pointing to the Tories voting against the Ukraine free-trade deal.

— Elephant in the room: The ever-unpredictable DONALD TRUMP and his presidential bid, with 256 days until E-Day.

“The U.S. is the most essential here because they have the technology, they have the military hardware,” said ROBERT AUSTIN of the Munk School.

“Without the Americans, the whole cause is lost. So, we're waiting for the outcome of this election.”

The close timing of the death of ALEXEI NAVALNY only underscores the stakes.

“One could argue that the war is about free speech,” Austin said, since Ukrainians don't want to “live in a dictatorship, and that's what Russia offers.”

— Related reading: POLITICO’s NICHOLAS VINOCUR has this report on a bleak moment: “Why the West is losing Ukraine”

A message from The Coalition For Canadian Research:

The Coalition for Canadian Research is sounding the alarm: Canada’s research funding is declining, threatening our future as a global leader in science and research. It's time the federal government steps up with significant investment. The world is watching, and our researchers are waiting. Canada must not fall behind. Let’s support researchers in this year’s budget. Act now and tell our elected officials it’s time to fund Canadian research.

CHASING COMMENT — Does Canada support Dutch PM MARK RUTTE for the next NATO secretary general?

Playbook asked Trudeau’s office after news that U.S. President JOE BIDEN had endorsed Rutte. The morning request was kicked to National Defense Minister BILL BLAIR’s office before being forwarded to Foreign Affairs Minister MÉLANIE JOLY’s team, who said a response was coming in the evening.

— Spoiler: It did not.

— Twist: Rutte’s bid quickly secured the backing of some of the 31-nation alliance’s biggest players including Germany, France and the United Kingdom. Romanian President KLAUS IOHANNIS name has been floated as a last-minute challenger to Rutte.

— Related POLITICO reading: EVA HARTOG and STUART LAU report from Brussels: “Can Mark Rutte save NATO?” 

NEXT PHASE FOR SANCTIONS — Canada dished out more than 2,200 sanctions during the past two years, fundamentally altering the legal landscape for corporations doing business in Canada.

“It's put sanctions regulation on the map in a way that is very profound and complex,” said WILLIAM PELLERIN, a partner at McMillan who specializes in international trade law. “It's become a C-suite issue.”

Trade-and-sanctions compliance has forced companies to become far more diligent, with some distancing themselves from partners, changing supply chains, finding new customers, and global companies assessing their nexus to Canada. But the steady stream of press releases might be running out.

Pellerin thinks we’ve reached “peak Russia sanctions,” meaning removals will take over the spotlight since the government “hasn't created a proper mechanism to address delistings or deny applications by Russian parties to delist in a timely manner.”

Canada also relies on compliance — announcing sanctions without proactively enforcing them, something “quite surprising this deep into the series of sanctions designations that we've had.”

That places greater emphasis on naming and shaming any companies still doing business with Russia. And as the government starts to think more about how to fund Ukraine’s reconstruction, leveraging Russian assets in Canada for that mission will look “increasingly attractive,” he noted.

According to the last figures made public by the RCMP, C$135,844,725 in assets have been frozen since the start of the war.

— Floodgates open: A review of the past year in sanctions published by the law firm Dentons forecasts that Canada’s seizure and forfeiture regime will be tested in the courts this year and, assuming the regime holds up, the report also says Canada will likely “expand its use in order to obtain funds for transfer to Ukraine.”

It suggests successful challenges to sanctions “would encourage other sanctioned persons to challenge their own listing in Canadian sanctions.”

— Prime Minister JUSTIN TRUDEAU is in the Ottawa region with no public events on his schedule.

— Deputy PM CHRYSTIA FREELAND is in Toronto with nothing public on her itinerary.

— Conservative Leader PIERRE POILIEVRE will be in Windsor, Ontario, for an evening “hunters meet and greet” at the Giovanni Caboto Club.

— Bloc Québécois Leader YVES-FRANÇOIS BLANCHET will be at Laval University for a morning discussion with students. A media availability will follow.

— Green Party Leader ELIZABETH MAY has “private meetings” in Toronto before heading back to Ottawa by train at night.

A message from The Coalition For Canadian Research:

Foreign Minister Mélanie Joly at the G20 foreign ministers meeting in Rio de Janeiro earlier this week. | AP

— Foreign Affairs Minister MÉLANIE JOLY is in New York for “high-level events” at United Nations HQ to mark the second anniversary of Russia’s war in Ukraine.

10 a.m. Industry Minister FRANÇOIS-PHILIPPE CHAMPAGNE’s office is teasing a “major milestone” for Moderna’s vaccine facility in Laval, Quebec. Champagne is in the city with Health Minister MARK HOLLAND, Public Services and Procurement Minister JEAN-YVES DUCLOS and Quebec Economy Minister PIERRE FITZGIBBON for the announcement.

— Advance voting starts for the Durham by-election and runs until Monday night.

UP: EZRA LEVANT, after his federal court case resulted in former Cabinet minister DAVID LAMETTI preserving records of his once-deactivated X/Twitter account.

DOWN: PIERRE POILIEVRE, who came out with a position against trans women using women’s bathrooms the same day as news broke of the death of a nonbinary youth in the U.S.

— The London Free Press’ JANE SIMS reports on the verdict in NATHANIEL VELTMAN’s murder trial for killing four members of a Muslim family: “The ‘offender,’ the judge said, is a terrorist.”

— JOHN IVISON reports in the National Post that MÉLANIE JOLY has instructed Global Affairs Canada to delay export permits for companies looking to sell weapons to Israel.

— Quebec Premier FRANÇOIS LEGAULT claims asylum seekers are a threat to the French language. Le Devoir’s LISA-MARIE GERVAIS has the details.

— JOHN PAUL TASKER reports for CBC the PM is drawing a contrast between his soon-to-drop online harms legislation and Poilievre’s stance on a pornography age-verification bill.

— MATHIEU DION and ESTEBAN DUARTE of Bloomberg News report that MICHAEL SABIA says he’s confident Hydro-Québec will find investors to back a more than C$100 billion grid expansion.

— CBC News reports that Independent MP KEVIN VUONG says he would be 'open' to joining Conservatives.

— KADY O’MALLEY nerds out on parliamentary process tactics, like the Conservatives’ last two estimates filibusters, with FRED DELOREY on iPolitics’ "On Background" pod this week. It’s like an hour-long segment of That's a Good Question, á la her days on The House.

Our latest policy newsletter for Pro s from SUE ALLAN and ZI-ANN LUM: Give or take $2 trillion.

In other news for Pro readers:

— California bill would ban ‘forever chemicals’ by 2030.

— DOE loan office tees up $710M for EV battery expansion projects.

— Florida schools removed more than 300 books in 2022-23.

— Biden's EV efforts collide with politics, industry pressure.

— It’s time to cancel debt for climate-stricken nations, Barbados leader says.

Birthdays: HBD to former Cabmin MARC GARNEAU.

Celebrating Saturday: Ontario MPP DAVE SMITH.

On Sunday: Liberal MP DAVID MCGUINTY, Alberta Sen. SCOTT TANNAS and former Conservative Cabinet minister ​​CHUCK STRAHL.

Birthdays, gatherings, social notices for this community: Send them our way.

Spotted: JUSTIN TRUDEAU touting his win over PIERRE POILIEVRE in a beer poll on social media (despite insisting in an interview that he does not care about polls, including that one).

Earnscliffe’s Ottawa team going bowling.

Conservative MP STEPHANIE KUSIE meeting with Rep. MARÍA ELVIRA SALAZAR (R-Fla.) in Miami.

Canadian NATO Parliamentary Association members in Brussels for joint meetings: Liberal MPs JULIE DZEROWICZ, PATRICIA LATTANZIO and DARREN FISHER, Conservative MPs CHERYL GALLANT and ALEX RUFF, Bloc MP CHRISTINE NORMANDIN and Sens. BRENT COTTER, CLAUDE CARIGNAN, CLÉMENT GIGNAC and REBECCA PATTERSON.

Conflict of Interest Act public registry update: JAMEE ST-HILAIRE, Transport Minister PABLO RODRIGUEZ’s policy director, disclosing his membership on the Quebec board of directors for the Liberal Party of Canada.

Prime Minister JUSTIN TRUDEAU expensed C$136.04 for Domino's Pizza for a Dec. 14 working lunch with 26 government employees in Ottawa (roughly C$5.23 per person) — the PM was in Vancouver the same day … Meanwhile, around the same time, Export Development Canada board of directors chair VIVIAN ABDELMESSIH expensed C$2,187.80 in Shinka Sushi Bar catering for 24 people (roughly C$91 per person) … The chosen caterer for Canada-Japan defense policy talks last December: La Bottega Nicastro.

Movers and shakers: CLAIRE SEABORN, chief of staff to Energy Minister JONATHAN WILKINSON, is leaving the Hill next month for a new gig at Torys, where she'll work as a lawyer in the firm's infrastructure and energy group. KYLE HARRIETHA will be Wilkinson's new right hand as chief.

GRAHAM FOX is leaving Navigator to join the exec team at Hydro-Québec. CHRIS HALL is taking over as managing principal.

— JFE Shoji Power Canada Inc., an electrical steel component manufacturer that wants to tap into the federal Strategic Innovation Fund for "investment in increased manufacturing capabilities," has been busy on the lobbying circuit.

Enterprise Canada's KATIE BOOTHBY-KUNG organized meetings with key officials, including PMO senior adviser BEN CHIN; CHRIS PADFIELD, assistant secretary to Cabinet for clean growth; AMIT SINGH, a senior adviser at Innovation, Science and Economic Development; SAMIR KASSAM, director of policy for sustainable development to Wilkinson; MIODRAG JOVANOVIC, assistant DM for tax policy at Finance Canada; MATHEW SAJKUNOVIC, also at Finance; and AHMED ELIWA, a policy adviser in the Privy Council Office's clean growth office.

— PAUL MADDISON, former commander of the Royal Canadian Navy and high commissioner to Australia, announced a pair of new roles: director at Compass Leaf Consulting; and defense and security committee member at the Group of Eight Australian universities.

Conservative MP JOËL GODIN is the recipient of the Kermode Prize by the Fédération des francophones de la Colombie-Britannique.

Former copyright board CEO NATHALIE THÉBERGE appointed vice chair of the CRTC … PATRICIA CONLIN is the People’s Party of Canada candidate in the Durham by-election.

Media mentions: Vice Media Group informed employees Thursday that it will stop publishing content on Vice.com and plans to cut "several hundred" positions.

GLEN MCGREGOR is joining CORMAC MAC SWEENEY in the CityNews bureau on Parliament Hill.

The Canadian Association of Journalists has launched its fourth annual newsroom diversity survey.

Farewells: FRANCE BÉLISLE resigned Thursday as mayor of Gatineau, citing a hostile political climate … Government House Leader STEVEN MACKINNON paying homage to Bélisle’s tenure while acknowledging “political life is tough and sometimes unfair.”

Send Playbookers tips to ottawaplaybook@politico.com .

A message from The Coalition For Canadian Research:

Supporting Canadian ambition should be a given. Yet, in an era where innovation and talent defines national strength, Canada’s current research funding shortfall is starkly out of step with our potential. While our global counterparts, like the US, Germany, and Japan, have made research investments a cornerstone of their economic agendas, Canada risks falling behind without a significant change in course.

Investing in research is a matter of pride and a pathway towards securing a more prosperous future where Canada leads in solving world challenges, from climate change to health crises. The time for half-measures is over. Canada must demonstrate ambition and invest in the brilliant minds that call our country home. Without action, we risk not only falling behind but also failing our potential as a beacon of innovation and excellence. Take action today and tell our leaders: Now is the moment to invest in Canadian research.

The House and Senate return Feb. 26.

→ Find House committees here.

→ Keep track of Senate committees here.

9 a.m. Inclusion Canada will hold a press conference in the National Press Theatre to ask parliamentarians to swiftly pass Bill C-62 with one amendment to the government bill on medical assistance in dying: “The full repeal of the ‘sunset clause.’”

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Thursday’s answer: Sen. PAULETTE SENIOR.

Props to ROBERT MCDOUGALL.

Friday’s question: Name the Jamaica-born judge who made history as the first Black Canadian to sit on a provincial appellate court in Canada. (Clue: They were the first Black chief justice of the Ontario Court of Appeal.)

Answers to ottawaplaybook@politico.com

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Nick Taylor-Vaisey @TaylorVaisey Sue Allan @susan_allan Maura Forrest @MauraForrest Kyle Duggan @Kyle_Duggan Zi-Ann Lum @ziannlum POLITICO Canada @politicoottawa

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